In recent years, Wall Street has been captivated by the potential of artificial intelligence (AI), fueled by the viral popularity of platforms like ChatGPT. However, as volatility returns to the markets, many of the highflying AI stocks have experienced a sell-off from their previous highs. This market correction, though, presents an opportunity for investors to capitalize on the long-term potential of AI stocks, particularly two of the "Magnificent Seven" companies: Meta Platforms and Microsoft.

Meta Platforms, the parent company of social media giant Facebook, has all the necessary ingredients to establish a dominant presence in the AI space. With access to a massive amount of first-party data from billions of daily users across Facebook, Instagram, WhatsApp, and Threads, Meta has a solid foundation for training AI models. Additionally, the company has made significant investments, accumulating nearly 600,000 high-performing GPUs from Nvidia and designing its own custom chip. Meta's commitment to developing its own AI models, such as the language model Llama, further solidifies its position in building a comprehensive AI ecosystem.

While Meta stands out as an all-in-one AI technology company, few others can match its capabilities. Competitors like Nvidia primarily focus on supplying AI chips for computing purposes, while Apple relies on AI models from OpenAI and Alphabet faces regulatory scrutiny over its domination in internet search. What sets Meta apart is that it is already a successful business, particularly in digital advertising, and AI has the potential to enhance its offerings. By launching AI tools that optimize ad effectiveness, Meta has witnessed a 10% year-over-year growth in ad impressions coupled with a 10% increase in the price per ad. Analysts project double-digit revenue growth for Meta over the next four years, making it an attractive investment opportunity.

In addition to Meta, Microsoft is also poised to benefit from the growing demand for AI. With its extensive reach in the technology sector and strategic partnerships such as the one with OpenAI, Microsoft has established itself as a key player in AI. Leveraging its cloud platform Azure to meet the computing needs of AI applications, as well as offering enterprise software to millions of global customers, Microsoft's cloud business is already experiencing significant growth. The company's strong ties with OpenAI, where all their computing is funneled through Azure, have further contributed to Azure's success. In fact, Azure's market share grew to 25% in Q1, closing the gap with Amazon's AWS. To accommodate increasing AI demand, Microsoft continues to invest in data centers and AI chips, positioning itself for continued growth in the years to come.

Despite their promising potential, both Meta Platforms and Microsoft have experienced a sell-off in recent times. However, this market correction presents an opportune moment for investors to consider these stocks as long-term buying opportunities. Meta Platforms, with a forward price-to-earnings (P/E) ratio of around 25 and an expected annualized earnings growth rate of 19%, offers a relatively reasonable valuation. Similarly, Microsoft, with a forward P/E ratio of 32 and an estimated annualized earnings growth rate of 15%, remains an appealing investment option. As renowned blue-chip technology stocks, both companies have proven track records and the potential for sustained success.

In conclusion, while Wall Street's AI craze may have lost some of its initial steam, the current market volatility provides a favorable environment for investors to capitalize on the long-term potential of AI stocks. Meta Platforms and Microsoft, with their strategic advantages and strong positioning in the AI space, offer promising investment opportunities. As with any investment, thorough research and careful consideration are essential, but for those seeking exposure to the AI market, the current market correction may prove to be a beneficial entry point.

Disclaimer: This article is not financial advice. Investors should conduct their own research and seek professional guidance before making any investment decisions.